February 7th, 2010
11:00 AM ET
12 years ago

Greenspan: Tax increases alone can't address deficit

Washington (CNN) - Cutting the U.S. deficit will require addressing the rising costs of entitlement programs such as Social Security, former Federal Reserve Chairman Alan Greenspan said Sunday.

Appearing on the NBC program "Meet the Press," Greenspan said the United States "can't erase deficits by tax increases alone."

"We have to recognize the fact that one of the things we have to do, as tough as its going to be, is that benefits are going to have to be pared in conjunction with tax increases," Greenspan said.

Asked about the recession, Greenspan declared it ended.

"The recession is over," he said, adding it "bottomed out" in mid-2009.

Now, Greenspan said, it was unclear if U.S. innovation would bring necessary job creation to reinvigorate the economy.

"We don't know where the jobs are coming from," Greenspan said. "We don't know how this market … is going to move forward."

Filed under: Alan Greenspan • Economy
soundoff (37 Responses)
  1. GI Joe

    How come no one ever talks about the biggest entitlement (and least deserved)?

    Our ex-congress members are entitled to a very very very big $$ amount after just 6 or 8 years sitting on a "hill" in D.C. How many Americans get that much after working 40 or 50 years? NONE. How many get that much from corporate america after 6 or 8 years? ONLY wall street and congress.

    Time to wake up people. THAT entitlement needs to change drastically. It's part of our deficit. It's part of the budget EVERY YEAR.

    February 7, 2010 11:09 am at 11:09 am |
  2. Scott, Tucson

    For starters how about freezing all congressional travel at taxpayers expense. If Queen Pelosi and her court wish to fly off somewheres, let the cost of her junkets come from their wallets and not ours.

    February 7, 2010 11:19 am at 11:19 am |
  3. Joe B

    GI Joe – thought you might like to see just what congress members get – to be honest with you, our city workers get almost as much of a pension after 22 years that the retired congress members get.

    "Members are eligible to start collecting at age 62 if they have at least five years of service. If they have 20 years of service under their belt, they can retire at 50. With 25 years of service, they can retire any time.

    What they get depends on a formula based on years of service and average pay(natch, right?).

    So a congressman with 22 years of service and whose average salary for the top three years was $153,900 gets $84,645. A current congressman ending up with six years of service (it's two-year terms, after all) would get at least $16,503 (at age 62, of course)."

    February 7, 2010 11:22 am at 11:22 am |
  4. Jill-IN

    Alan Greenspan should not be consulted for his expertise in fixing the economy or government. He was part of the problem that told us to trust Wall Street to regulate itself. You must get a copy of the DVD titled "Frontline: The Warning". You will understand the wrong headed thinking of Greenspand et al and how they got us here. If you want to protect your assets and savings you owe it to yourself to watch this program and share it with your friends.

    February 7, 2010 11:24 am at 11:24 am |
  5. lannymous

    His wife is very defense of Mr. Soros, the defacto head of the Progressive/Democrat party. That tells us all we need to know about Mr. Greenspan in his time of senility.

    February 7, 2010 11:25 am at 11:25 am |
  6. MsDp

    Of course Greenspan will state "tax increases" (he is really speaking about the tax expiration for the rich) will not get us out of the recesssion because his taxes will go up. But, we know this is not true. Think about it – if the unemployed were working, this would inject more taxes into the system; because the employment rate is so high, and most of the spending is the result of providing unemployment income to a lot of us who would otherwise be sleeping out side and eating off of the ground, etc., and this event has had a direct impact on our economy-this unemployed group does not contribute to growing the revenue (taxes). And moreover, because of the tax break that has been given to most of the rich, revenue is seriously affected. Therefore, we really do need the tax breaks for the rich to expire RIGHT NOW, in order to gain revenues. Then when the jobs come back, additional taxes will go into revenue and offset the deficit dramatically. PLEASE AMERICAN THINK FOR YOUR SELF!!!! This kind of logic does not require any one to be a rocket science, just think for yourself and use common sense.

    February 7, 2010 11:32 am at 11:32 am |
  7. seanm

    No offense but Alan was one of the main reasons we are in this recession. His deregulatory zeal, lack of oversight, and creation of various bubbles through low interest rates are the prime reasons we're hurting right now. So to listen to his various "prescriptions" seems sort of silly now doesn't it?

    February 7, 2010 11:34 am at 11:34 am |
  8. Dubya

    Is this thesame greenspan who supported the bush economic policy and declared there was no housing bubble? Hmmm......... so he got lucky enough to chair the Fed while Bill Clinton was our President and so got a reputation which far outpaced his talents and ideas. He is a devotee of ayn rand who anyone wit half an inling of intelligence knows was a huge fraud driven by her bile and hatred of a humanity which did not accept her rantings as anything more than those of a lunatic.

    So, the question is why is anyone reporting what greenspan, cheney, palin are saying? Might as well go ask the clerk at the gorcery store. Probably have a better chance of getting it right at least sometimes.

    February 7, 2010 11:40 am at 11:40 am |
  9. american patriot

    NO, but closing the CORRUPT ILEGALL Federal Reserve sure will.
    Abolish this Bankiong Cartel once and FOREVER.

    February 7, 2010 11:43 am at 11:43 am |
  10. GI Joe

    Joe B – thanks for the specific info. I've read the rules, but didn't want to write a book on a blog.

    Most people would be happy with $16,000 + after just 6 years. Look at how many companies you could work for in all those years (multiply $16 K by the number of companies retired from).

    February 7, 2010 11:46 am at 11:46 am |
  11. Dubya

    You can tell a beck or hanity or limbaugh slob right away - they go on about trivia as if important - "Pelosi's travl" is a fav. So you may be math challenged, but how is $100,000 going to do anything in terms of the national debt? The interest we accrue on the national debt run up by reagan and bush is more than that in the time it takes to type the number. I seem to remember a decade ago the main issue in the campaign being how we were going to use the massive projected SURPLUS left behind by the Clinton administration ad their sound economic policies. A fellow named Gore, who won the election, suggested we start using the surplus to do what his previous boss had done – paying down debt so we would have wiggle room say around 2010. republicons had a better idea. Massive unfunded tax cuts for the very rich.

    And testifying about how this was a good idea once the election was stolen??? Why it was a fellow named greenspan......

    February 7, 2010 11:47 am at 11:47 am |
  12. Joe

    I feel a lot of people don't bring up this side of the tax the rich debate: if you were extremely well off, and you could move to a different country and literally save millions a year, what would you do? With enough time, higher taxes drive people out of the place they live. This would result in a permanent loss of revenue for our government, and less jobs at all the places the wealthy spend their money.

    On a separate note, I find it funny that most who complain of tax breaks for big business also complain about outsourcing. Imagine the jobs that would come back to this country if our tax rates were in line with India/China? After adding state and local taxes, doing business in certain states of America literally costs more than any place in the world in terms of taxes.

    Just food for thought.

    February 7, 2010 11:57 am at 11:57 am |
  13. duh ray ray

    We dont want any thing that makes sense,just guns and bibles we never read.

    February 7, 2010 12:00 pm at 12:00 pm |
  14. fred

    May God have mercy upon each one of us !

    February 7, 2010 12:22 pm at 12:22 pm |
  15. Kate in SW Fla

    The only thing of truth this man has said in the past 20 years is his admission that supply-side economics, by whatever name you call it, DOES NOT WORK. You can call it Reaganomics, supply-side, market driven or laissez-faire, it is all the same – "voodoo economics" that favor the wealthy and powereful at the expense of those who actually do the work. The "market" did not self-regulate – it self-imploded. Without reasonable but effective regulation, that is vigorously enforced, the "market" will collapse completely. Nothing else this bozo says matters to me.

    February 7, 2010 12:22 pm at 12:22 pm |
  16. ThinkAgain

    Remember how shocked and stunned Greenspan looked when he said that he never dreamed businesses would be not act in their best interests (i.e., gamble away people's hard-earned money for the sake of a quick profit)?

    I used to think Greenspan was smart, but now I know he's naive and foolish when it comes to economic matters. So his opinion is worthless!

    February 7, 2010 12:26 pm at 12:26 pm |
  17. ThinkAgain

    Here's an income-generating idea for our country:

    1. Reveal the names of all the Americans who have hidden money in Swiss bank accounts in an effort to avoid paying taxes.

    2. In addition to their names, include their political party affiliation.

    3. Collect those unpaid taxes.

    4. Put those monies towards funding the stimulus and/or paying down the deficit.

    February 7, 2010 12:28 pm at 12:28 pm |
  18. Cameron

    People need to step back a moment from criticizing Greenspan and consider what he has to say.

    First of all, the economy is a huge, multi-dimensional, complex organism- and no one can say for certain what effects specific actions will have on the economy- all they can do is make the best, most well-informed choice they have.

    Second, Greenspan may be getting up there in age, but he is quite astute and very perceptive, having run the Fed for such a long duration of time.

    So while Greenspan's choices while Fed Chairman may not have resulted in the most desirable outcomes, at least consider what he has to say, given his background and experience.

    February 7, 2010 12:41 pm at 12:41 pm |
  19. B

    After this guy turned a Blind Eye to regulation and did everything in his power to give breaks to the wealthy and none to the middle class. He has NO credibility in the current situation except to double talk his history and say nothing meaningful to the current situation. It is a inditement to his past concern only for the wealthy..

    February 7, 2010 12:45 pm at 12:45 pm |
  20. LouAz

    Pay no attention to that man behind the curtain . . .

    February 7, 2010 01:14 pm at 1:14 pm |
  21. Liz T., Tucson

    It is typical for someone who doesn't need it to want to cut social security and medicare after having been an irresponsible steward of the public coffers. People deserve to be able to count on something for retirement after Wall Street blew away our investments.

    Thanks for nothing, Greenspan.

    February 7, 2010 01:32 pm at 1:32 pm |
  22. Jenn, Philadelphia

    And this is the problem with entitlement programs. When money is good we want to support everybody. When times are tough, we need to make cuts, but the problem is, we've made a "dependent" class.

    February 7, 2010 01:34 pm at 1:34 pm |
  23. Dean

    Instead of addressing the rising costs of entitlement programs such as Social Security, how about quiting giving our money away to other countries and quit funding programs like the sex lives of turtles?

    February 7, 2010 01:44 pm at 1:44 pm |
  24. Ken, AZ

    One solution to the Social Security problem is to raise the limit of income that Social Security Taxes are paid on. Why is it fair for an individual earning less than $106,000 to pay Social Securities taxes on 100% of his earnings while someone earning $1.5 million pays Social Securities taxes on only 10% of his earnings and collects maximum benefits at age 62 or 65. Where is the fairness in that?

    February 7, 2010 01:47 pm at 1:47 pm |
  25. ICARE - countdown to 2011

    Shouldnt have adopted 2 wars!!!!

    Anyway, yeah, if we truly love our country, it's time to ask ourselves, what we can do for the country, not what the country can do for us.....

    Have we all done our parts? No.

    February 7, 2010 01:48 pm at 1:48 pm |
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